Nelson Knight, President, Real Estate and Investments, Apple Hospitality REIT, interviewed by Rachel Humphrey

Nelson discusses balancing tradition with innovation in family businesses. He shares his leadership evolution, leaning into curiosity to challenge the status quo, and overcoming self-doubt. Nelson talks about self care and why he'd tell his younger self and others to enjoy each phase of life more.

Transcript

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Rachel Humphrey 0:02

I am Rachel Humphrey with its Personal Stories, a hospitality podcast. We are dedicated to empowering personal success within the hospitality industry, and I'm very excited to be joined today, a long time in the making by with Nelson Knight with Apple Hospitality. Nelson, welcome to the program.

Nelson Knight 0:20

Thank you very much. It's a pleasure to be here today.

Rachel Humphrey 0:23

I am gonna jump right in 'cause I know that we will end up being short on time with lots of things I wanna cover with you, but I wanna start with your particular path to leadership. One of the things I love so much about the industry is that you can really carve any path you want. You and I may have very different ways of getting to leadership within the hospitality industry, but they are each unique to us. So tell us a little bit about your path to get to where you are today, and if you think there were any pivotal moments. Maybe that shaped that journey for you?

Nelson Knight 0:52

Absolutely. Rachel, I grew up in real estate, whether it was on the personal side with my family and their ranching expertise or on the commercial side through apartment communities. My father had started a company and that afforded some opportunities that I recognized were. We're probably unique to my situation, but I had the opportunity at a pretty early age to work as a leasing agent while I was in high school at one of our local communities here in the broader Richmond, Virginia area. It was an unbelievable experience, so I high schooler would go to high school, had my soccer practices, then would go to this apartment community and was a leasing agent, and got to work alongside some very amazing individuals. That really showed me the importance of hard work, of customer acquisition, of being relatable to others. And I really started my foundation from there. I had other opportunities to work in corporate roles around a call center that found and identified potential candidates or potential tenants for. Our apartment communities. This was pre-internet era. And we would run an ad in an apartment finder, which was a regional based public, I

Speaker 3 2:09

remember that. And,

Nelson Knight 2:11

We would source those leads and plug them into our own properties. And I had a great time doing that. So that was really my high school career, somewhat unique. I wasn't a bagger at a grocery store or something else. But from there, I had the opportunity to then branch into our hospitality company. I did several internships, over the last 20 years that I've worked full-time at Apple Hospitality and I've had the opportunity to wear many different hats. I think that's what's so special about our industry is the ability to start somewhere and end up somewhere else. And my journey. Was unique. I started as an asset manager and had the opportunity to work alongside Chrissy Gathright, who I know you and I'm sure a number of your listening audience know very well. She was our chief operating officer at the time and a trusted board member today, but she essentially trained me showed me the importance of a p and l, showed me how to consolidate and look at earnings from an asset management perspective. And I had a very core responsibility of our full service hotels, which was a small subset of our portfolio at the time, but a very important one. And it gave me an opportunity to really dive into the p and l and also travel some which I enjoyed, and meet with property teams and learn and grow and find ways to better the performance. S from there I had the opportunity to then work in our capital markets alongside our chairman. And over my tenure we raised over $7 billion in equity to invest in hospitality. And so while I didn't necessarily do a lot of that legwork, the foundation was there and I was working alongside our chairman I had the opportunity to see what it took to manage a relationship. With a fundraiser, how to think through the capital stack of our acquisitions, what would qualify as an institutional investment and how to communicate out to shareholders. So it was really unique and exciting experience. And from there I had the opportunity to then venture into acquisitions. And I had the opportunity to work alongside Justin, who I think was on your podcast maybe a year or two ago. Yeah. And really had the opportunity to learn and grow under his leadership. Learned the importance of markets, the importance of underwriting taking the p and ls that I've learned from Chrissy, and applying them through an underwriting and building out performas. And then from there, I also had the opportunity to focus on some of our development deals when we were non public, but, or when we were non-traded, but a public company. Roughly a third of our acquisitions at any given point were these development deals and we really didn't have anybody within our organization. Looking after those deals along the way, they take longer to develop a construction cycle could take anywhere from 18 to 24 plus months. I had the opportunity to go onsite, visit the properties ensure that they're being delivered to the standards that we would want. And that was a great experience. All of these different roles and different hats ultimately have had. Culminated into what I'm doing today, which is heading up our investment decisions here at Apple.

Rachel Humphrey 5:39

Wow, that's incredible and so many great leadership lessons in there. Whether it is learning from Chrissy and Justin and your chairman and others, getting to know so many different aspects of the business so that you're able to see a company very broadly. You talked about the relationships and other things we're gonna touch on in a little bit, so I appreciate you sharing that. One of the things I wanna talk about specifically though is you mentioned it being a family business at least in its origin and in the hospitality industry. There are certainly lots of businesses that do start or continue to be family businesses, and one of the things I hear from a lot of people is that there is a. Real balance between honoring the traditions, the culture, the leadership, the things that have created this very impactful organization, but then also doing new things, whether it be the internet being introduced or new technologies or new culture, organization, things like that. Can you talk a little bit about leadership in a family business and maybe some of the lessons you've learned from that?

Nelson Knight 6:45

Absolutely. I think that's what makes the hospitality industry. So interesting is that there are so many wonderful examples of family enterprise. It's probably one of the only major industries that has that. And it starts, you look at families like the Marriotts who are third generation at this point and have built an unbelievable legacy, unbelievable company to other owner operators and developers that are first, second, and third generation. And when I think through that, within. My own personal story as a second generation hotelier. I think there's a lot of hopefully lessons that some of your listening audience can glean from what I've experienced over the last 20 years. But, what I have found is a common theme in those that have started is very humble beginnings. My, my father grew up on a cattle ranch out west, was drafted in Vietnam, packed up his. His family, his wife, and moved, my mother moved across the country to Virginia. And from there, after serving in the military began building syndications on a commission basis in real estate and ultimately grew that over time into what we're doing today. And really I think from my vantage point as a second generation it's important to honor the traditions. Of the past. I recognize that I'm very fortunate to be in a position that I am. And so to give honor to the work that has proceeded your efforts. And then look for ways to continue to grow and optimize them. I think one example within our own industry or within our own hotel company is when we started in hospitality. We wanted to be a hundred percent extended stay. It's very natural evolution from multifamily. So we thought we can buy these hotels at the time that were owned by Promise the Homeland Suites brand which was ultimately acquired by Hilton and and some residence ins from Marriott. And that would be our platform. And we'd be an extended stay reit. We quickly learned that our fundraising would outpace that. And that we needed to pivot. And so still recognizing where we came from and the fact that we wanted to do business with great brand partners like Hilton and Marriott we pivoted and began focusing on not only on extended stay, but on select service as well. Hey

Speaker 3 9:13

everybody. And that was

Nelson Knight 9:14

an opportunity for us to really learn and grow and for Justin and myself to continue to push forward the mission and vision while staying true to, the traditions that Apple was founded on originally. I think also some lessons learned a along the way. One is that competence builds trust, Shouldn't rely on your name to for a title. And for me that was important. I early on decided that I wanted to go back to school and pursue pursue a master's degree. I felt like that was an important component to my education and I recognize that there's a lot of places that you can learn and grow and on the job experience is important, but I felt like in order for me to gain the respect of those that I'd be working with, that it was an important step for me to take the extra time and effort to do that. And I've been blessed immensely from it. It gave me a foundation of financial analysis. That I could begin to grow on and that proficiency, that competence, gains, trust and support for those around you. I'd also say one other kind piece of advice, if you will, that I'd recommend is if you're working within a family business to focus on having core and unique responsibilities. Justin and I work very well together. And we work well with our chairman, our father but we each have very distinct and core responsibilities. And there is overlap, but not a lot. And there's an opportunity for us all to lead and our respective sphere.

Rachel Humphrey 10:48

I love the focus on honoring the humble beginnings, but really in saying competence builds trust in this case, not relying on your name, your family name, to automatically feel like you are earning that trust. For you. And part of that is in the self-care and wellness, which as an industry, we are also feeling a big evolution toward. Talk a little bit about your lessons from this year in this particular aspect of leadership.

Nelson Knight 11:15

So my arm goes off at 5:00 AM every morning. It doesn't matter if I go to bed late the night before or early, it's going off at five and I get up and consistency, I think over the course of many years creates really healthy habits. And there's some days that, yeah I can't put in a long workout. Maybe it's a. 20 minute workout, and there's other days that I can give more, but that's special time in the morning that's allowed me to continue to focus on my health. And this past year I took that period of time in the morning that I would normally have worked out and really focused on my physical therapy and on my returning to the way that I, I felt pre-accident. And so that was a unique. Circumstance, but it gave me a time slot in the day before everything else got crazy before my kids woke up and before I was rushing off to take them to school and and ultimately come into the office to focus on. I empathize with those that may have chronic illnesses or anything, but what I would say is modest changes to your life. Over time have a big impact and can add incremental health no matter where your starting point is.

Rachel Humphrey 12:31

I appreciate you sharing that and wishing you continued wellness and the self-care. I like the idea of little changes over time as well too. I think it makes it much easier to stick with non-negotiables or with. Behaviors when they become part of your life rather than fads or quick fixes. One of the things that really excites me about this podcast is the tieback to curiosity that so many leaders change share. And I think that. It's probably a way I would describe myself, but never a word I would've used to describe myself until I started doing this podcast. You talked about learning different aspects of the business, but I'm curious if there we go. I'm curious you would define yourself as a person who is curious and then what's something you're curious about today, either inside or outside of hospitality?

Nelson Knight 13:24

Yeah. Oh I love I love to be curious. I love. People who are curious because I think it challenges the status quo of the, we do this because we've always done it this way. And I think it, it pushes a growth mindset on anybody who has curiosity at their core. To some extent COVID really pushed that mindset on all of us, right? When the model. Shifted dramatically and occupancies dropped. It pushed us all to be curious and solving problems. And, one way that we approached that within our own business was, how do we take and do more with less? And so we saw. Declining occupancies as an opportunistic time to ultimately renovate our properties, and maybe was counterintuitive at the time where we were also having to support a lot more because there were fewer guests in our hotels, but there was a lot less disruption as well. We weren't taking rooms offline that otherwise would've had guests in them. And so we felt like it was an opportune time for us to renovate a number of our hotels, but really. Thought we needed to work on the scope. Historically before COVID, we would go in and renovate to a brand standard that was pretty exhaustive of everything in the room and everything in the lobby. And we realized that there are many things that were less guest facing that could be kept. And with the help of the brand. We began to come up with a programmatic way to surgically approach these renovations and keep some items and replace others that would have higher guest impact. Which ultimately allowed us to do more renovations during a period of time that was really tough and positioned ourselves to come out of COVID in a very unique way. I think in terms of one thing that I might be curious about in. This year and in coming years, we've seen a big AI boom, a big kind of tech technological advancements. I'm curious to see where that leads. I recognize that hospitality is our core business, and part of that is face-to-face interaction, but I'm very curious to see over the next 12 to 24 months where technology. And hospitality might meet to help support a better customer experience while producing better margins for ownership groups like ourselves.

Rachel Humphrey 15:51

It's interesting. I love the tie of curiosity to challenging the status quo. Why do we do it this way? How can we do it differently? Really getting in and analyzing each individual piece as a form of curiosity for each of us. Leadership is something that we are probably not taught in school other than a few might who might have executive coaches or do a course here and there. Not a lot of continued formal education in leadership, but we do continue to evolve by what we experienced during a year. I'm curious for you, as you look back on your periods of leadership, if you can identify. What has gotten better over time in the style in which you lead? And is there anything that maybe has gotten a little more difficult over time?

Nelson Knight 16:40

I think for me, over time, over the last 20 plus years for me, I think the ability to not only focus on the detail, recognizing a big part of my responsibility is acquisitions, dispositions hotel renovations. So focusing on the detail, I think coming out of school and hitting the job early, I was, things were a little bit more black and white when they read one way or another on paper. And I've progressed through my career and experienced the great financial crisis and COVID and so many other things and seen the cyclical nature of the hospitality industry and real estate abroad I think it's allowed me to not only have the fundamentals of that very detail oriented look, but also be able to step back. And look at the big picture. Does the asset that I'm looking at fit our model? Does it is it a strategic location for us long term? Are there fundamentals that I can't see on the paper, but I can see when I go to the property or the market that I think will bolster our valuation for the deal and support shareholder growth. Over time. One example of that, more recently we bought a portfolio of hotels in Salt Lake, a broader Salt Lake area. And this was a target market for us. We felt like we were underexposed in this area. But we felt like pricing was relatively full on two deals in particular. And we really. Weren't sure whether or not we'd be able to get to a place that made sense for both the seller and ourselves. But after visiting the two properties, seeing what had been done on site, seeing opportunities that we could find for additional revenue streams and other things, we ultimately were able to get to a place that made sense. And those deals have gone on and been just really strong performers for us. So I think the ability to see the specific but then step out and make sure that it's a true fit and that the timing's right for us. It would be one thing that, has improved over time in terms of something that maybe has. De decline. I'm not sure how you phrased it, or or maybe a place that I've become less flexible, let's say would be a willingness to transact with individuals who are either not trustworthy or don't necessarily have the, might be trustworthy, but don't have the capabilities to do the deal that they're looking at. I think early on in my career I was willing to, really. Go to battle and try to see if I could get something to work. And, I think at one point really early on, we had a portfolio signed up that was significantly larger than the portfolio we actually ultimately ended up transacting on because the buyer couldn't get their financing together. And I recognized that the time commitment for me, but also for me and our staff was significant. And I'm less willing to risk that today. And so while I'm willing to enter into new relationships, find new people I become wiser about how to structure those deals to protect the interest and the time commitment that Apple and, the people that I work with are committing to. Because if it doesn't work out I, it just it's. Lose situation where, we've pushed forward to try and do something and our team is committed and has worked, countless hours and to not get it across the finish line. I feel a lot of pressure from that. I think today I've become wiser in how I structure those deals to ensure that we can get to the finish.

Rachel Humphrey 20:10

You might view that as something that's declining. Others might see that as something that is an improvement because you are continuing to see, as you said, the big picture in other deals, but also looking at the big picture of how choosing deals that may not. B, the right deals can have a last, a more lasting impact. Yeah. One of the things we hear a lot about is self-doubt. Imposter syndrome has certainly been a name that is attached to it. Questioning confidence levels. I'm curious if, as you have come through the industry at various. Stages with different roles, different ways that you are trying to lead, if you ever experience forms of self-doubt, and if so, you either have strategies for overcoming that or what would you recommend to other people who might be feeling a little bit challenged as they're trying to advance their career because they are getting bogged down by some self-doubt?

Nelson Knight 21:02

Yeah, I, that's a great question. And I think all of us probably feel to varying degrees, times of doubt and specifically self-doubt. I know for me personally, I can be my toughest critic. And part of that is because I'm striving to do and set goals that are high and difficult to achieve. And setting those goals not only for myself, but also for those that I work with. And if we fall short of that, that can be discouraging and you can wonder whether or not whether or not you. You're doing it right. And so it, it can be deflating at times. I think it's important. So it is important to recognize that there are some benefits to self-doubt. So long as they end up not being the loudest voice in your head. You can use a questioning mindset to analyze and to discover new paths that can improve. Processes or ways that you might approach a challenge in the future? For me, one non-work related example of this would be I compete in my spare time in horse riding event. It's a western horse riding event called Cutting. And I compete against people who do this full time. It is literally their career and they ride every day. They are training the horses that they're competing on and going to shows very regularly, and I don't have that time. I don't have that ability. And so I show. And a couple times a year, but I'm competing against those that are doing it all the time. And I found there was a point in time where I just felt like I wasn't making the finals and I really wanted to be in the finals, but I recognize that was a group of 20 individuals out of three or 400 contestants. So it's, it takes a lot to get there. And I just felt like there for a couple years I wasn't getting in the finals and it was frustrating. And I started to think, am I capable? Is this something I'm doing? Am I able to, can I, am I able to compete against the, these people that do it all the time? And I turned that self-doubt into a positive and I began to say, yes I can, but I need to change some things. And some of those things involve, my dedicated practice. So even though I can't write every day. Let's make the time that I do be purposeful. Let's focus on specific aspects of my writing and of my showing that I can improve so that so that it's intentional practice. I also began keeping a journal of my show experience so that three, four or five months down the road when I showed again, I could look back and revisit what I had learned from the last show and build upon that so that, it I wouldn't have to learn those lessons again and again. And, that time passed. I've made final sense. I've built confidence again around it. And I think we can utilize that self-doubt so long as it's not the largest voice in our head to make changes and to improve performance.

Rachel Humphrey 24:06

I didn't know that you were riding in that way and competitively, and it's an ex an interesting lesson because you said a couple things. Number one was changing the own narrative in our head. Can I? Yes I can. But then the intentionality of putting in the work, really being self-aware enough to say I'm being in control of what we can control. And so I think that's a very interesting thing to tie to leadership in the industry is about how are you. If you think about our motto, empowering Personal Success, are you,

Nelson Knight 24:37

sorry.

Rachel Humphrey 24:37

No, that's okay. You're good.

Nelson Knight 24:39

I, we're not moving enough.

Rachel Humphrey 24:41

Are you, are we doing what we can to show up as our best selves in each of those different ways? As I mentioned at the start, we are running short on time. I wanna click over to two other things. Advice to our younger selves, which is my absolute favorite question to be asked and to ask because I think we are all works in progress and reflection is a really big part of that. So as you look back on 21-year-old Nelson graduating from school having had high school experiences, probably having an idea of what you were gonna do long term, what would you tell that young man either about how things have turned out for you or maybe something you wish you knew then that would've made your path? Easier or different along the way.

Nelson Knight 25:25

Yeah I think I would tell my younger self to enjoy each phase of life a little bit more.

Speaker 3 25:32

I love that.

Nelson Knight 25:33

Think and maybe some of your audience and does this as well, but I'm continually focused on the next phase of life, the next deal that we can do. And I recognize that in that mindset. I've missed a lot of amazing opportunities in my life and yeah I think it's important to look back and, or as I've looked back and recognize that. Yeah there's some things that I can change, but I really should enjoy and be comfortable where I am at. That doesn't mean not to work hard. It doesn't mean not to be engaged, but to trust the process and recognize that growth happens a little bit by a little bit, and that over the span of time you're gonna accomplish a lot of things. And so just enjoy the point in time that you're at.

Rachel Humphrey 26:21

Being present in the now. I really love that. As we wrap up thinking about, I just mentioned our motto of empowering personal success. You've shared a lot of wonderful advice with us today. Any final thoughts on something you would tell one of our listeners as they are either deep into their leadership experience or looking at continuing to grow their leadership capabilities?

Nelson Knight 26:45

Yeah I would say trusting yourself. Believe in yourself. Know that you can accomplish likely a lot more than you think you can. So set those goals make them big goals and then work really hard to achieve 'em.

Rachel Humphrey 27:01

I love that. Trust in yourself and take set big goals and go after them. Nelson, I really appreciate your time today. I appreciate all the times I get to share in the industry with you, your leadership within the industry and really for sharing your journey with us today and some of the insights. That you have had for our audience. We know there's a lot of ways you can spend your day. We thank you for tuning in and hope you'll visit us@itspersonalstories.com to hear more from Nelson, but also the other industry leaders who have shared, likewise, their personal stories. Nelson, thanks so much for joining us today. Thank you,

Speaker 4 27:34

Rachel.